The events of the past nine months raise two different sorts of question. One
is what we ought to do in the future. The other is what happened and why. I
would like to consider the second question. In order to make clear why I think
there is a puzzle, I will start with a very brief summary of the relevant
facts.

1. The Corporation ran a surplus, on both an accounting and cash flow basis, in
1992 and 1993, as reported in the financial summaries released by the
then-Executive Director, Tony Provine.

2. As of the last Board meeting in 1993, there was no public evidence of any
financial problem.

3. As of the first Board meeting of 1994, the Board asserted that the
Corporation's financial problems were so severe that a membership rate increase
of about 40% was inadequate and had to be supplemented by a new rule requiring
membership to attend events--a change that had been proposed in the past and
dropped because it appeared to be massively unpopular with the membership. The
budget figures sent out by the Board implied a financial gap to be filled of
about a quarter of a million dollars a year.

Under heavy pressure from the membership, the Board cancelled the required
membership decision before it had actually been implemented, replacing it with
a $3 per non-member event surcharge. The surcharge was publicly justified as
necessary because of the financial emergency. A conservative estimate of income
from the surcharge, assuming it is enforced, would be a hundred thousand
dollars a year--in addition to the income from the rate increase.

4. The Board has never asserted that, between the last meeting of 1993 and the
first meeting of 1994, any unexpected events occurred that would have imposed
very large financial costs on the Society.

This series of events raises a puzzle--what happened to convert a modest
surplus into an enormous deficit? We are not talking about small sums here--the
gap is about a quarter of a million dollars a year, or roughly six times the
Society's expense for insurance in 1993 (to take one item that some people
seemed to think might be responsible). On the available evidence, I see only
two plausible answers:

A. The financial emergency was real but was not, or ought not to have been, a
surprise. Over the previous two years the Board had decided on a number of
expensive changes in how the Corporation was run but had done nothing to
provide the money to pay for them. It suddenly occurred to them in January of
1994 that the result would be a deficit. If that is what happened, the Board
acted incompetently and irresponsibly, and those in charge owe us a public
explanation and apology for doing so. That is the explanation that seems most
consistent with the Board's letter to the membership--although the apology was
missing.

A': The conspiratorial version of A, which I think less plausible. The Board
wanted to do unpopular things such as imposing compulsory membership, which it
thought it could get past the membership only in an emergency situation. It
therefore created a financial emergency by voting expensive changes without
doing anything about financing them.

B. The financial emergency was fictitious. Someone, possibly Provine, possibly
one or more Board members, wanted to greatly increase the income and
expenditure of the Corporation. He achieved that objective by panicking the
Board into believing in a non-existent financial crisis and taking measures to
deal with it.

If that is what happened, the Board members responsible (the ones who panicked,
and also the ones, if any, responsible for misleading them) again owe us an
explanation and an apology. Perhaps more important, if the financial emergency
was a fiction, the surcharge should be eliminated immediately and the rate
increase eventually eliminated or reduced.

Matters are complicated somewhat by the fact that the financial emergency
became a self-fulfilling prophecy. The actions that the Board took have
probably resulted in additional corporate costs, during this year, in the
neighborhood of a hundred thousand dollars. My (very rough) calculations are:

If this is right, the Corporation really does require extra money, from either
the rate increase or the surcharge, both of which have only recently gone into
effect--but it only requires the extra income temporarily, to make up for the
sums wasted by (if my interpretation of the events is correct) the Board's
mistakes.

So far I have been dealing with the financial puzzle. A second puzzle is the
sequence of events that led to the Mandamus petition. Here a brief summary of
the facts is:

1. The Bylaws provide, in what appears very clear language, that any member may
examine the books of the corporation ("for any reasonable purpose at any
reasonable time").

2. After the January meeting, when it appeared that the Corporation was
suffering from some sort of financial emergency, some members attempted to
exercise that right. The Board members they spoke to referred them to the
Executive Director, who stalled for a considerable time and then refused their
request. Negotiations occurred between the Board and members who wished to see
the books. Accounts of what happened and why differ, but for whatever reason
the Board did not permit those members, nor (so far as I know) any others, to
see the books.

3. At that point, a group of members petitioned a California court for a writ
of Mandamus to compel the Board to open the books; they also asked for some
other things, most notably access to the mailing list if they wished to send
out impeachment petitions. So far as I know, the Board's only public response
to the legal action prior to the actual hearing was a press release put out on
the electronic media by the Executive Director in the name of the Board. That
press release claimed that the Board was fully complying with its bylaws and
that the only question at issue was whether it was required to open its books
by California statute. In fact, the petitioners had based their case on the
bylaws not the statutes. The Board never disowned that press release, so
although presumably drafted by Provine, it must be taken as the official stance
of the Board that employed him.

4. The California Court ruled in favor of the petitioners on essentially all
points, basing its ruling on the bylaws. It also awarded the petitioners
$20,000 in legal expenses. The outcome suggests that the judge did not think
the defendants had much of a case.

Here again, we are left with a puzzle--why did the Board refuse to obey its own
bylaws, and why did it continue to do so even after it became clear that the
other side was willing to go to court? Or, to put it a little differently, one
question is why the Board wanted to keep the books closed and a second question
is how it thought it could get away with doing so.

So far as I know, no answer to either question has been provided to the
membership by the Board. One possibility is that it was the Executive Director,
not the Board, who chose to keep the books closed--perhaps on the general
principle that the less the members know, the less likely they are to interfere
with the people running the organization. If so, the Board is at fault for
failing to adequately monitor and control its employee--but we do not have to
suppose that the Board actually had something it was trying to hide.

Why did the Board think it could get away with violating its own bylaws? One
possibility is that it received, and believed, bad legal advice--bad enough to
persuade the Board it was going to win a case which it seemed obvious to many
people, including the judge who tried it, that the Board ought to lose. If so
the Board is again at fault--and that particular error cost the Corporation a
very large amount of money.

Another possibility is that the Board knew that, if the case came to trial, it
would probably lose, but thought it could force the petitioners into backing
down by making the cost of the legal action sufficiently high. According to a
spokesman for the petitioners, the actual cost of the action to them was about
$29,000. It would not be unreasonable for the Board to believe that, faced with
such costs, and with no assurance that the court would award them legal costs
even if they won, the petitioners would give up, allowing the Board to violate
its own bylaws with impunity. If that is what happened, the Board members
responsible owe us not only an explanation and an apology but, in my opinion,
their resignation--from the Board and probably from the Society.

Conclusion

The point of this posting is simple. The Board has behaved, with regard to both
its financial and its legal decisions, in a puzzling manner. The most obvious
explanations are highly discreditable to the Board that made the relevant
decisions--they imply, at the least, incompetence that did enormous damage to
the Society. If one of those explanations is correct, the Board owes us an
explanation, an admission of fault, and an apology. If some other explanation
is correct, the Board owes us at least an explanation.

What I found most disturbing about the Board statements published in T.I. was
that they simply ignored such issues. They claimed that the actions they took
were justified by a financial emergency. But there was no explanation of where
the financial emergency came from--how we acquired, in a space of three months,
an unexpected deficit of a quarter of a million dollars a year. Not only was
the puzzle not answered, it was never even posed.

Before closing, I ought to qualify my remarks in one way. I have spoken of "The
Board" as if it were an individual, and as such responsible for its actions.
But the Board of Directors of the SCA is a committee, and one whose membership
has changed substantially over the past nine months. If the Board did things
that were wrong, then some Board members must have done things that were
wrong--but it does not follow that all did, or even that any of the present
Board members did. And in some cases the Board's failure to act might reflect,
not the views of a majority, but the ability of a minority to block action.

All of this complicates questions about whether particular people were at
fault. But I do not think it complicates the question of whether the Board owes
the membership an honest explanation of what happened--something we have not
yet gotten.